Sunday, September 7, 2008

Market Update: Unadvertised Bargains Abound In LIC!

From an outsider's perspective, you'd figure that not has changed in the Long Island City market of late. If anything, you may figure that prices seem the same and that perhaps the market is flat and slower. However, I can report from experience, that right now there is a big difference between what is being advertised and what you can bargain for in the current marketplace.

How does having all of your closing costs covered sound? What if they threw in a pile of cash to buy down your mortgage rate a point? What if you offered 10% below ask and they actually take it? Well, a variety of these scenarios are playing out in a number of buildings in LIC. The market is slow and the developers are acutely interested in moving product.

So, you ask, why aren't they putting huge ads in the NY Times to call attention to these deals? The answer is simple. In order to officially reduce price (and then be able to legally advertise it), you have to file an amendment. If you file an amendment, all of the exiting shareholders have to be notified- and you end up with a whole bunch on unhappy shareholders. So, they just wait for prospects and then talk turkey when they have them one on one.

This is not happening in all buildings, I should note. Just look at Star Tower. The apartments at Star are selling like hotcakes and they have amended prices up numerous times. A new development priced right will sell right out of the gate.

If you have bought in LIC in the past year, do not be discouraged. Supply looks to peak in the near term. There are a few developments ready to open soon. However, with changes to the 421-A program, and the surge in building that followed, supply is near peak. Yes, there will be some inventory to be digested, and some people who may have gotten in over there heads and will look to sell as soon as they close. But, these look to be short-term issues. The long term value proposition is hard to deny. NYC is a very expensive place to live and LIC, a hotbed of culture and character, has more and more to offer as time goes by. Nobody can argue with it's convenience to Manhattan and the prices offer a substantial discount to living West of the river.

I guess the point here is that if you know where to look and how to ask, you can get a heck of a deal right now in LIC- better than you'd think.


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  2. No amendment needs to be filed to sell or advertise at lower prices then the offering plan. Amendments only need to be filed when you raise the price over the offering price.